Public banks’ worst phase under Manmohan regime: Nirmala Sitharaman

New York: India’s public sector banks had the “worst phase” under the “combination” of former prime minister Manmohan Singh and ex-RBI governor Raghuram Rajan, and giving the ailing banks a “lifeline” was her primary duty now, Finance Minister Nirmala Sitharaman has said.

The public sector banks have been grappling with bad loans and the government has been taking measures to address the issue. In August, the government announced upfront capital infusion to the tune of Rs 70,000 crore into the public sector banks. Besides, 10 public sector banks are being consolidated into four.

Delivering a lecture at Columbia University’s School of International and Public Affairs on Tuesday, Sitharaman said, “While economists can take a view of what prevails today or prevailed years ago, but I will also want answers for the time when Rajan was in the Governor’s post speaking about the Indian banks, for which today to give a lifeline is the primary duty of the Finance Minister of India. And the lifeline-kind of an emergency has not come overnight.”

“I do respect Raghuram Rajan as a great scholar who chose to be in the central bank in India at a time when the Indian economy was all buoyant,” she said.

The event was also attended by former NITI Aayog Vice Chairman Arvind Panagariya, professor and eminent economist Jagdish Bhagwati and India’s Consul General in New York, Sandeep Chakravorty.